Monday, December 06, 2010

With O'Leary In The Grave.

Nick Cohen:The terms Ireland's new rulers in the EU have imposed on their subjects are inexcusable. It is hard to tell which is worse: the stringency of the EU's demands or the immorality that lies behind its choice of targets. The debts of Ireland's private banks are now the Irish public's burden. Rather than force senior bond holders in German, French and British banks to accept the consequences of their reckless lending, taxpayers will take the loss and bail them out.

"This is a sell-out of our country. It is a surrender by the Government of this country's sovereignty, of its rights to make its own decisions, determine its own budgets and the Labour Party will not be bound by this document," Labour Leader Eamon Gilmore told the House today.

1 Comments:

The problem with Ireland is that in 2008 the government panicked, and guaranteed the deposits in ALL Irish banks, without any upper limit. Money flooded into the banks, which settled their balance sheets for a short time, but when the UK and other governments started offering their banks the same promise, money flooded out of the Irish system, and what was left was an insurmountable debt, and a foolish promise to cover that debt using the public purse.

The FIDC in the US has a ceiling, as do similar agencies in Canada and many other countries. But when the Irish government made their pledge, they set financial avalanche in motion.

The ONLY way the Irish government was able to tap into the European Stablization fund was is if the Fund itself could establish a high enough rating that the issued bond would be deemed a stable investment, and considering the fact that half the backers of the bond are insolvent governments themselves, the only way Ireland could borrow through this fund, considering their appalling debt ad credit rating, was to accept some draconian stipulations.

Ireland is like a dude whose wages are being pre-emtpively garnished to pay alimony and back taxes, with about a nickel and half left over for them.

Ireland is a poor country, and always has been, but for one brief shining moment they won the lottery, got caught up in the glitter of the high life - rags to riches to rags.

The situation is not hopeless for Ireland, as New Zealand went through the same pain. Plus diaspora is a culturally ingrained tradition. Perhaps it's time for the paddies to spread their wings again!